Just before Christmas trade negotiators for the United States and Panama announced that a deal had been reached on a US-Panama Free Trade Agreement. However, at the time this issue of The Panama News was uploaded the text of the agreement was still being withheld from the public in both countries and the Panamanian government was disputing one of the key claims about the deal that was made on the US Trade Representative’s website.

According to the US Trade Representative, "Panama agreed to exceed commitments made in the WTO, and to dismantle significant services and investment barriers, such as lifting restrictions on investment in retail trade, ensuring access to contracts related to the Panama Canal, and providing new access in professional services like accounting, architectural, engineering, and legal services that previously had been reserved exclusively to Panamanian nationals." But that was after the most expensive political campaign in this country’s history, waged with public funds for one side only, in which the voters were promised that the jobs on the Panama Canal expansion project would be reserved for Panamanians.

The members of Panamanian Society of Engineers and Architects, which had been taken over last year in a PRD coup wherein Panama Canal Authority engineers were in effect required to join the organization and vote for the government nominee as a condition of employment, notwithstanding the new leadership became irate about the apparently broken promise. But not so, says the Torrijos administration, which claims that the version published by the US Trade Representative is erroneous.

That was the green light for the first salvos of criticism from the opposition political parties. Juan Carlos Varela of the Panameñistas said that he supports the idea of free trade but complained about the details being withheld. Former President Guillermo Endara, who with his new Vanguardia Moral de la Patria party is trying to displace the present opposition parties and once again become the principal alternative to the PRD, questioned certain reported provisions and added in a press release that "since the negociations or the Free Trade Agreement with the United States culminated nearly three weeks ago, we Panamanians have only received conflicting versions about the gains or concessions that each party has obtained or yielded" and demanded the document’s immediate publication. He warned of a "catastrophe to the national economy."

By and large the forces that opposed the Torrijos - Alemán Zubieta Plan to expand the Panama Canal are lined up against a free trade agreement with the United States, and it is expected that many farmers, professionals and small business owners will swell their ranks. However, there is virtually no chance of the treaty being rejected by the National Assembly, where the PRD caucus holds an absolute majority and many of the opposition deputies are also inclined to vote in favor of the deal.

The proposal’s fate in the US Congress is more doubtful, and the Torrijos administration is putting a lot of effort into lobbying in Washington. One key politician in the process will be Representative Charles Rangel, the Harlem Democrat who now heads the House Ways and Means Committee.

In Panama the issue is already affecting the struggle within the anti-PRD side of the political spectrum over who will head the opposition in 2009, and there is a possibility that it might play into internal PRD politics as well, if one of the party factions or contenders for the next presidential nominations decides to take the position that Torrijos cut a bad deal for Panama.

The odds are, however, that the deal gets ratified in both the United States and Panama and its abrogation or retention becomes a key political divide in the 2009 Panamanian elections.